Author: Viceroy Research

CSTE’s major revenue growth product, marketed as a collaboration with Lowe’s, is not for sale according to Lowe’s Customer Services and store checks. This is contrary sell-side forecasts highlighting this as a growth driver.

Of CSTE’s listed sales agents, there is a growing percentage no longer sell (or have never sold) CSTE products, switching to higher margin products. Agents who sell CSTE are charging a higher retail price than consumers pay at IKEA for identical products. Ikea countertops include free installation!

We believe CSTE’s inventory should be revised materially downwards to reflect decreasing average selling prices within their larger customers.

SEC enquiries into CSTE revenue growth factors inconsistently addressed by management. The major revenue variance factor, increased average selling price, is not supported by channel checks which show prices decreasing at major customers/outlets.

Competitor analysis suggests CSTE are either not maintaining machinery adequately or that machinery is severely under utilized.

CSTE has consistently missed guidance; a theme we identify and is unlikely to change.

Shareholder friendly programmes discontinued. CSTE is now a negative earnings growth vehicle with no payout policy.

Fictional institutional sales, Quintis books revenues which are
intermittently used to gain access to debt finance, before being written off.

Debt finance used to engage in Ponzi-like behavior.

Viceroy’s price target for Quintis is $0. The scenario is reminiscent of historical MIS ventures such as Timbercorp and Great Southern, both of which are now defunct(consensus with Glaucus Research Group).